Bargaining, mergers, and technology: choice in bilaterally oligopolistic industries
Abstract: "This paper provides a conceptual framework of multilateral bargaining in a bilaterally oligopolistic industry to analyze the motivations for horizontal mergers, technology choice, and their welfare implications. We first analyze the...
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Abstract: "This paper provides a conceptual framework of multilateral bargaining in a bilaterally oligopolistic industry to analyze the motivations for horizontal mergers, technology choice, and their welfare implications. We first analyze the implication of market structure for the distribution of industry profits. We find that retailer mergers are more likely (less likely) if suppliers have increasing (decreasing) unit costs, while supplier mergers are more likely (less likely) if goods are substitutes (complements). In a second step we explore how market structure affects suppliers' technology choice, which reflects a trade-off between inframarginal and marginal production costs. We find that suppliers focus more on marginal cost reduction if (1) retailers are integrated and (2) suppliers are non-integrated. In a final step we consider the whole picture where both market structure and (subsequent) technology choice are endogenous. Analyzing the equilibrium market structure, we find cases
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Physician reimbursement, time-consistency and the quality of care
Abstract: "We use a model of horizontal and vertical differentiation to study physicians' incentives to provide quality in the physician-patient relationship under price regulation. If the price is the only regulatory variable, the social planner...
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Abstract: "We use a model of horizontal and vertical differentiation to study physicians' incentives to provide quality in the physician-patient relationship under price regulation. If the price is the only regulatory variable, the social planner cannot implement the first-best policy. Moreover, the second-best policy is time inconsistent. Excess entry and firstbest efficient total quality provision is observed in the game without commitment. Allowing physicians to compete in prices does not solve the commitment problem since the competitive solution coincides with the time consistent outcome. In the median voter equilibrium the time consistency problem is more severe." (author's abstract)
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On the profitability of collusion in location games
Abstract: "In this note we take a first step towards the analysis of collusion in markets with spatial competition, focusing on the case of pure location choices. We find that collusion can only be profitable if a coalition contains more than half of...
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Abstract: "In this note we take a first step towards the analysis of collusion in markets with spatial competition, focusing on the case of pure location choices. We find that collusion can only be profitable if a coalition contains more than half of all players. This result holds for location games played in k-dimensional Euclidean space as long as consumers are distributed via atomless density functions. For competition on the unit interval, unit circle, and unit square we also derive sufficient conditions for collusion to be profitable." (author's abstract)
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Modeling oligopolistic price adjustment in micro level panel data
Abstract: "Consumer prices in many markets are persistently dispersed both across retail outlets and over time. While the cross sectional distribution of prices is stable, individual stores change their position in the distribution over time. It is a...
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Abstract: "Consumer prices in many markets are persistently dispersed both across retail outlets and over time. While the cross sectional distribution of prices is stable, individual stores change their position in the distribution over time. It is a challenge to model oligopolistic price adjustment to capture these features of consumer markets. In belief based models of price adjustment stores react to expected profits. The expectations are based on the observed vector of market prices in the previous periods. In a reinforcement model of price adjustment, if a strategy has proven fruitful in the past, it is apt to be the strategy relied upon at the present. We collect price data on a homogeneous consumer product in Israel. We estimate the structural parameter of the models. We find that the reinforcement model describes the data better than the belief based models." (author's abstract)
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